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Economy in Brief

U.S. Industrial Production Recovery Stutters
by Tom Moeller  July 15, 2010

The recovery in industrial output ground to a halt last month. Overall production ticked up just 0.1 after a little-revised 1.3 May increase. But all of the latest increase was due to hot temperatures and higher utility output. In the factory sector, output fell 0.4% for the second decline this year. Nevertheless, output is up 8.3% since the end of the last recession with output of business equipment, usually a laggard, up 11.4%. 

Amongst major industry groupings, it was output of business equipment that held up last month with a 0.9% rise. The 11.4% annual gain in equipment output also outpaced the gains in most other categories. In individual industries, output of machinery is up 16.5% y/y, computers & electronic products is up 16.3% and electrical equipment, appliances & components is up 5.8%. Overall consumer goods output has risen 6.8% y/y led by a 52.5% jump in motor vehicle output but in June it declined slightly. Less motor vehicles, consumer goods output fell 1.3% last month (+2.4% y/y). Working the other way, apparel output rose 1.4% last month (9.5% y/y).

Capacity utilization held stable at 74.1%, its highest level since November 2008. In the factory sector alone, utilization fell slightly to 71.4%, still near the highest level since October 2008 and up from the 2009 low of 65.4%.

The industrial production data are available in Haver's USECON database with more detail available in the IP database.

Industrial Production (SA,%) June May April June Y/Y 2009 2008 2007
Total Output 0.1 1.3 0.3 8.2 -9.3 -3.3 2.7
  Manufacturing -0.4 1.0 0.8 8.3 -11.1 -4.5 2.9
    Consumer Goods -0.5 1.9 -0.9 6.8 -5.8 -4.20 0.9
    Business Equipment 0.9 1.4 1.8 11.4 -12.2 -1.5 4.5
    Construction Supplies -0.3 0.4 3.8 5.2 -16.7 -9.5 -1.2
  Materials 0.4 1.0 0.5 9.8 -9.7 -2.7 3.7
  Utilities 2.8 5.5 -4.3 7.2 -2.6 -0.1 3.4
Capacity Utilization (%) 74.1 74.1 73.1 68.2 (June '09) 70.0 77.9 81.3
  Factory Utilization 71.4 71.7 70.9 65.4 67.2 75.0 79.6
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